reseller incentive report

18
Backpay –estimating the program results Based on Participants Survey and Sell Out Analysis Done on a base of my real report

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Page 1: Reseller Incentive Report

Backpay –estimating the program resultsBased on Participants Survey

and Sell Out Analysis

Done on a base of my real report

Page 2: Reseller Incentive Report

BackPay™ program is designed to handsomely reward those resellers who increase both the volume of products and the number of product categories they sell.” – Official Program Brochure

Primary success indicators: Program motivates participants to increase amount of sold

Partnumbers and number of product categories Evaluation of program success:

Analysis of resellers’ survey results to see if participants confirm changed buying behavior and have positive attitudes towards BackPay Survey of 400 BackPay resellers from 8 EMEA

countries was conducted. Analysis of resellers’ purchasing patterns prior and after

BackPay enrollment to estimate motivational effect Analysis will be based on sell out reports; Only BackPay resellers signed up in Q1, Q2, and Q3

will be considered to ensure at least 1 year of pre- and post-signup history;

Analysis findings and identified patterns will be applied to all enrolled resellers

Page 3: Reseller Incentive Report

Has the BackPay program motivated you to increase your overall sales?-Survey Question

Bars show percents

Yes No Don't know/Won't say

Q14a. Has the PayBaX programmemotivated you to increase your overall sales?

0%

20%

40%

60%

Perc

ent

n=118

30%

n=259

65%

n=23

6%

95% of these confirmed

increased sales of Products

Most frequently mentioned obstacles to increased sales were:•Limited market demand;•Low priority given to products (“non-core business”);•Complicated rules and delayed rebates

Page 4: Reseller Incentive Report

Average of 17 units per active reseller prior to BackPay enrollment

Average of 19 units per active reseller after BackPay enrollment

12% increase in average quarterly # of Partnumbers

Sergey Sleptsov

Page 5: Reseller Incentive Report

Sales reports show consistent increase in average amount of Partnumbers per active program participant after program enrolment;

Observed average increase in quarterly Partnumbers ranges from 2 to 6 units or from 12% to 40%;

At least part of that increase is caused by the program motivation as confirmed by the surveyed resellers;

To estimate Program’s incremental revenue we will use optimistic and pessimistic approaches as outlined further

Sergey Sleptsov

Page 6: Reseller Incentive Report

Optimistic Approach:•Average quarterly number of Partnumbers per active IT reseller remained steady in EMEA throughout obseved period so any increase among BackPay resellers should be associated with Program’s motivation;•This can be illustrated by trending average Partnumbers per non-BackPay reseller in countries with stagnating IT markets (see chart below)•Here we’ll assume quarterly incremental Partnumbers increase of 4 units per active BackPay reseller

Pessimistic Approach:•Average quarterly number of Partnumbers per active IT reseller in EMEA increased by 1-2 units in observed period;•This can be illustrated by trending average Partnumbers per non-BackPay reseller in countries with healthy IT markets (see chart below);•Here we’ll assume quarterly incremental Partnumbers increase of 2 units per active BackPay reseller

Region 1 NonBackPay Resellers

7 6 6 6 6 7 6 8 6 60

1

2

3

4

5

6

7

8

9

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Part

num

bers

per

Act

ive

Res

elle

rr

Region2 Non BackPay Resellers

14 15 14 14 15 13 16 19 17 150

2

4

6

8

10

12

14

16

18

20

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Part

num

bers

per

Act

ive

Res

elle

r

Sergey Sleptsov

Page 7: Reseller Incentive Report

Pessimistic EstimateAt average price of a sold Partnumber of € and assuming average increase in quarterly sold Partnumbers per active BackPay reseller at 2 units Program’s incremental revenue in EMEA up to Q3 is estimated at € :

Optimistic EstimateAt average price of a sold Partnumber of € and assuming average increase in quarterly sold Partnumbers per active BackPay reseller at 4 units Program’s incremental revenue in EMEA up to Q3 is estimated at € :

Qtr # of Resellers Signed up

Quarters in Program

Activity Factor: applied to calculate

average # of quarters reseller

is active

Active Quarters

Since Program Signup

Est. Incremetal Partnumbers (at 4 Qtrly

Units per Active BackPay Reseller)

Incremetal Revenue at

€ per Partnumber, OPTIMISTIC

estimate

Est. Incremetal Partnumbers (at 2 Qtrly

Units per Active BackPay Reseller)

Incremetal Revenue at

€186 per Partnumber, PESSIMISTIC

estimate

Q1 10 0.6 6 Q2 9 0.6 5.4 Q3 8 0.6 4.8 Q4 7 0.6 4.2 Q1 6 0.6 3.6 Q2 5 0.6 3 Q3 4 0.6 2.4 Q4 3 0.6 1.8 Q1 2 0.6 1.2 Q2 1 0.6 0.6

Sergey Sleptsov

Page 8: Reseller Incentive Report

Has the BackPay programme motivated you to increase the number of categories of products you sell?-Survey Question

24% of these began selling Accessories; 21% - began selling Racks; 9% - mobiles and cables

Most frequent obstacles to increased sales were:•Limited market demand – sell only “what’s required by customers”;•Relatively high prices for some products;•Complicated rules and delayed rebates

31% of BackPay resellers confirmed sales of new categories during a similar survey

Bars show percents

Yes No Don't know/won't say

Q15. Has the BackPay programme motivated youto increase the number of categories

of products you sell?

0%

25%

50%

75%

Perc

ent

n=66

17%

n=324

81%

n=103%

Sergey Sleptsov

Page 9: Reseller Incentive Report

Chart shows what shares of active resellers buy racks comparing patterns of BackPay participants to non-BackPay resellers;

Greater shares indicate greater acceptance of the category by the segment;

Shares of resellers buying racks notably increase for all observed, but the rise is much steeper among BackPay members;

“Penetration Rate” was generally higher with BackPay participants even prior to their sign-up for the program;

Observed upward curve among BackPay members is likely to be a combination of program motivation and of their “rack-friendly” attitude

•Source: Sell Out Reports;•Samples (Depending on Quarter):

EMEA BackPay Resellers: 189 – 235 companies; Non-BackPay Resellers: 2,085 – 5,293 companies;

Share of Active Resellers Buying Racks

0%

2%

4%

6%

8%

10%

12%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

BackPay Members Non-BackPay Resellers, Region 1 Non-BackPay Resellers, Region 2

Sergey Sleptsov

Page 10: Reseller Incentive Report

Error Bars show 95.0% Cl of Mean

Category

3.0

3.5

4.0

4.5

5.0

4.0 3.93.7

3.9 3.9

3.5

ease of the registration

process

clarity of information in

describing the overall

program

clear information on who is eligible for

the BackPay program

timely notification of

when you have been

accepted into the BackPay

program

clear information on

how the rebate is

calculated

1=Very dissatisfied 2=Dissatisfied 3=Neither satisfied nor dissatisfied

4=Satisfied 5=Very satisfied

Rebates calculations are too complex; Overall satisfaction with the program is quite low suffering from

delayed rebate checks and lack of timely status information

Overall satisfaction

with 's BackPay program

Most of the areas rated below

satisfaction level!

Sergey Sleptsov

Page 11: Reseller Incentive Report

“a statement as to what the heck its all about …never received anything since signing 2 years ago”

“clear definition of what you get for what” “explanation of calculation and timing of payment” “feedback is too slow. Often we don’t know how we are doing” “need to receive payments in good time and need info on how they are calculated

on the actual sales - have not received a cheque since last November” “rebate-calculation should be simpler than what it is, I find it a bit difficult” “too late to have the result” “make it simple” “information on what its all about and how it works” “like to know how it works … what they pay … when … and why” “More explanation more clear program” “Provide feedback and more information about what I should sell”Sergey Sleptsov

Page 12: Reseller Incentive Report

Resellers are not getting the desired attention from – 40% of them did not speak to an rep in a year:

Frequency of Contacts with Company Rep.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Twice a month

Once a month

Twice a quarter

Once a quarter

Twice a year

Once a year

Never

Ideally, how frequently would you like to talk to or see your representative?Within the last year, how often have you spoken with or seen your representative?

Sergey Sleptsov

Page 13: Reseller Incentive Report

“contact people - communication do not hear from them about anything”

“ maybe a little bit more hands on from account managers - we chase them rather than them contacting us”

“having more contacts with the 's Reps” “I do not have any Rep. or any contact name to help me out

for a better understanding of the program” “I never got any contact, maybe that's why I never

proposed/pushed on to my clients” “I never spoke to any Rep. maybe if I could see/talk to

somebody will help my sales” “more contact between and the reseller to explain and give

some news” “more contacts such as Reps coming around the office for

example”

Sergey Sleptsov

Page 14: Reseller Incentive Report

Training events availability is not meeting the demand either – majority of BackPay resellers did not have any in a whole year despite claimed interest:

Bars show percents

0 1-2 3-4 5-6 7-8 9-10 Over 10

Q8. How many training eventshave you participated in within the last year

(including face to face, web seminar, live seminar / eXpo)?

10%

20%

30%

40%

50%

n=192 n=142 n=33 n=11 n=4 n=2 n=9

Bars show percents

Twic

e a

mon

th

Onc

e a

mon

th

Twic

e a

quar

ter

Onc

e a

quar

ter

Twic

e a

year

Onc

e a

year

Nev

er

Q9. How often would you like toreceive training on solutions?

0%

10%

20%

30%

n=11 n=75 n=4 n=63 n=63 n=123 n=60

Sergey Sleptsov

Page 15: Reseller Incentive Report

10% 20% 30% 40% 50%

Other

Self-study

Don't know

Videos

Web-based training

Web seminars

Live seminars / eXpo

2%

8%

11%

15%

23%

35%

50%

Majority of Resellers prefers live events:

Sergey Sleptsov

Page 16: Reseller Incentive Report

0.0% 25.0% 50.0% 75.0%

OtherAir & DC products

Mobile / Cables products3 Phase UPS productsAccessories products

Services productsManagement software products

Rack & Rack Accessories productsSurge products

Power and ElectricityData Center Power Infrastructure

Networking OverviewUPS products

7.5%

18.5%

20.8%

22.0%

22.8%

24.5%

26.3%

27.8%

29.3%

32.3%

33.5%

33.8%

84.3%

Channel is still heavily focused on market – not more than 1/3 of resellers is looking outside the boundaries of the traditional business despite the available product range and program’s motivational appeal:

Ranked #2 at 42%

Sergey Sleptsov

Page 17: Reseller Incentive Report

“A good idea having few private lessons about the Products starting from the Low Level up to the High Level products”

“ training closer to my city” “Having more training on Racks and other high level

products categories” “I would like having more information about the high

levels products” “more info and training” “more training over web-cast for reseller”

Sergey Sleptsov

Page 18: Reseller Incentive Report

BackPay showed only limited success in changing buying behavior of the program participants – 30% of them confirmed motivation to sell more units and just 17% - motivation to increase Partnumber breadth;

These relatively low results as well as generally low satisfaction with the program are primarily caused by the combination of the following factors: Rebate calculations rules are quite complicated for an average reseller and lack

clarity in showing what exact reward is given for a particular action. This is an issue that was widely expressed by respondents;

Program's motivational appeal is damaged further by ’s inability to provide up to date rebate status to participants and even to deliver rebate cheques in a timely manner. These problems caused by the state of our internal processes become a great de-motivator to the involved in promoting the program ;

Resellers – much more than their counterparts - are still heavily focused on the side of business paying little attention to (or having little knowledge of) the incremental revenue opportunities offered by the continually expanding portfolio. That conservative attitude creates extra barrier to the program objective of increased product range. Resellers express unfulfilled need for a greater support from reps that can become crucial in gaining the product knowledge.

Even that limited progress resulted in a positive ROI generated by the program. Sergey Sleptsov